Original subtitles

(dog barking)

(somber music)

- [Voiceover] In a little less than a year,

the financial crisis reached a new level

and spread to the whole country.

In the countryside, the situation was alarming.

Worse than that of the cities.

Wheat went down 50 percent in value.

The spectacular fall in farm prices hit farmers hard.

And their produce became unsellable.

There were millions of tons of food,

but no one could afford to buy.

Farmers could no longer pay their debts,

were thrown off their land, and took to the roads.

- The plight everybody identifies with.

The plight of homelessness, of poverty, of no work,

of family disintegration becomes a universal plight.

- People were looking for new places to work,

and so there was this sense of moving around.

Also moving out of the agricultural states

which were particularly badly affected.

- There are mass migrations out of the middle west

of evicted farmers looking desperately for work someplace.

Migrant labor of some kind or another.

- And many of them lost their farms at this time.

And this was in the early 1930s.

And farm evictions were a terrible stain upon society.

Many farmers were evicted because

they rented their land or they owned their land

and they couldn't keep up the payments.

- Farmers out in the midwest

are forcibly stopping auctions

from happening by evicted farmers.

When the judge shows up to auction off the farm,

the farmer's neighbors gather and pay a penny for that farm,

don't let anybody else bid,

and return the farm to the evicted farmer.

(inaudible salesman)

- In rural areas, you'd have no place to go.

And what you have here, what the real tragedy is

that's kind of stupid irony that you have farmers

destroying their crops because

they literally can't afford to take them to market

for the prices they're getting

and people are going without food.

You have people cold and without clothing

when the warehouses are bulging with clothing.

You have homes and apartments standing empty

while people are having to sleep

in the streets and on the subway,

and in the subways and so forth.

It's that irony that really was

grating about the depression.

- Here was an economic system that blew up

between 1929 and 1932, and when you've got

an explosion of this kind, it's very difficult

to just stick the bits together again and carry on

as if nothing happened.

- The steel industry is operating by 1931

at ten percent of its capacity.

Unemployment will soon approach 25 percent of the workforce.

There was a kind of agitation in the country.

There was turmoil, then there was strikes

going on and their were picket lines and demonstrations.

The Communist Party was leading a struggle

for the rights of workers.

There's something about the poverty,

the conditions of that time which made many people

feel that, "Yes, this is the only organization

"that is doing something about the depression."

- All the social insurgencies of the 1930s,

whether they're anti-monopoly movements

or farmer labor independent political parties,

have a heavy quotient

of progressive and radical militants.

The labor movement in the 1930s inconceivable

without the role, vital role, played by militant cadre

from the Communist Party and the Socialist Party.

(demonstrators yelling)

(gunshots)

- [Voiceover] In Ford factories where the number of workers

had dropped from 130,000 to 37,000,

those who were lucky enough to keep their jobs

saw their monthly salary fall from 50 to 16 dollars.

And when they went on strike,

the police opened fire on them.

Five were killed and dozens wounded.

- Herbert Hoover does certain things which are so offensive.

And perhaps the most offensive thing he does

is to send troops to break up what is called the Bonus Army,

which is gathered in Washington,

and these are veterans of World War I,

to demand an early payment of the bonuses

that were promised them when they returned

from the European War in 1918.

- 12, 14,000 came from all over the country.

They road the rails, mounted trains they couldn't afford.

Every way they could, they came to Washington DC.

They presented a petition to Congress,

and Congress rejected it.

They sort of set up camp on the mall,

which became the sort of Hooverville

of the Bonus Expeditionary Force.

Some of the people who had come went home.

Some really didn't have any reason to go home,

so they just stayed on.

And they were no threat to anybody.

- [Voiceover] Hoover allowed himself

to be led astray by two soldiers.

Major Dwight D. Eisenhower, future US president,

and above all, General Douglass MacArthur.

Douglass MacArthur, you have to understand,

was the kind of person who once he got an idea in his head,

it never occurred to him that it could be wrong.

And he got the idea in his head

that these people represented

a grave threat to the republic.

That they might somehow storm Congress or do something.

I mean these were families.

They're not just an army.

They're not armed or anything.

And he began to put this to Hoover.

And finally, MacArthur persuaded him

that this was indeed a threat.

- And Hoover sent out the military to shoot at them.

It was disastrous.

- [Voiceover] Under General MacArthur's command,

four cavalry platoons, an infantry column

equipped with bayonets and gas masks,

and six tanks attacked and set fire to shacks.

(somber music)

Two people were shot dead, and a third,

a two month old baby, suffocated to death from tear gas.

Another child was more fortunate.

As he tried to return to his shack to get his teddy bear,

a soldier stopped him by

stabbing him in the legs with his bayonet.

- It was an ugly thing.

And what it did, and the reaction of the American people

was "Herbert Hoover must have lost his mind."

This destroyed the last shred of credibility he had.

MacArthur, because he was MacArthur,

went to his grave believing he'd saved the republic

from, you know, a revolution.

- In great irony that the heroes of,

military heroes of World War II MacArthur

as now would attack the veterans of World War I

and break up the Bonus Army.

- And this so angers people.

It's such a brutal kind of callous indifference

to the plight of Americans.

- That incident basically killed Hoover's reputation.

I mean his reputation was already in disrepair

over the bad economic policies.

That was disastrous for Hoover's approval ratings.

- [Voiceover] Prosperity is just around the corner!

- [Voiceover] What we'd like to know is which corner.

We've turned so many corners now we're dizzy.

- [Voiceover] But still I'm positive we'll soon be busy!

- Hoover again with great reluctance

begins to establish some minimal forms of federal relief.

But all of Hoover's actions don't measure up

to the dimensions of the crisis.

They don't come close to measuring up

to the severity of the crisis.

- The governor of New York, remember,

was Franklin D. Roosevelt.

And Roosevelt did try to institute

some sort of welfare programs to alleviate

the suffering because it was

so obvious in big cities like New York.

- Roosevelt himself of course was rich, an aristocrat.

And he was not really attuned

to the lives of the poor.

His wife Elanor Roosevelt, she actually went into

poor districts and she saw how people lived.

She had seen with her own eyes the conditions of the poor.

How much poverty there was and how much distress there was

was made known to Roosevelt not directly, but from his wife.

- [Elaine] Everybody expected Eleanor Roosevelt to show up

because she was his eyes and ears.

And she went all sorts of places.

Roosevelt depended upon her because

he couldn't get to a lot of places.

- Roosevelt, who was struck by polio in 1921

faced a problem with no historical precedent.

He was disabled, and yet, he stood

at the next presidential election against Hoover.

He had promised he would to millions of underprivileged

who were waiting upon him like the messiah.

- There was poem called Waiting on Roosevelt.

"We're waiting for Roosevelt to do something for us.

"We're waiting and waiting."

And so the poem ends with something like,

you know "Where are you Mr. Roosevelt?"

- [Voiceover] On July 2nd, 1932,

the Democrat Party convention chose Franklin D. Roosevelt

as candidate for the presidential election.

He pronounced for the first time

the words "New Deal".

- I pledge myself

to a new deal for the American people!

(applause)

- [Voiceover] In this dramatic context,

the elections in November 1932 had symbolic significance.

Roosevelt promised to curve the devastating effects

of the 1929 crash with measures such as

the reform of the banking system,

the assurance of a healthy currency,

and economic and social aid.

But what convinced the voters was to his despair,

his rather hasty promise to repeal the amendment

which prohibited the consumption of alcohol.

In other words, the end of the Prohibition.

Franklin D. Roosevelt won with 23 million votes

compared to Hoover who only obtained 16 million.

This landslide victory put the Democrats in power

for the next 20 years.

- Franklin D. Roosevelt, president of the United States.

- Let me thank you again, and tell you

that I hope to see you all very soon

and bid you an affectionate good night.

- [Voiceover] In November 1932,

the United States had just elected Roosevelt.

Meanwhile, Germany was at crossroads in its destiny.

The economic crisis threw many

worried desperate Germans into Hitler's arms.

The capital repatriated to the US

brought him instant success.

"They're not going to put a painter in Bismark's chair,"

Roosevelt commanded.

- The anxiety, the fear, the scapegoating

that naturally accompanies this kind of economic desperation

had been abroad in the land in Germany for many years.

Now it becomes even more popular

and then looking for scapegoats for the collapse.

Communists, Jews.

I think there's no question that the economic collapse,

the global economic collapse of that period

is responsible, heavily responsible, for the rise of Hitler.

There are similar movements even in a place

as politically placid as the United States.

There are the growth of fascist movements.

It's against Jews and Wall Street Semitic,

Wall Street financiers as the main producers

of the depression as Shylocks who

are looting the American economy.

There's a tradition of that.

A kind of underground tradition

of that in American political life.

That surfaces in the 30s.

- Lots of anti-Semitism also leveled

at the Roosevelt administration

which had many Jewish people working there.

We do not have a perfectly moral history.

- There are famous Americans who actually

give voice to anti-Semitic sentiments.

Henry Ford, who's an American icon.

He's an American hero.

He's Hitler's hero too.

Hitler actually has a photograph of Henry Ford

in his headquarters in Berlin or some place.

And the reason for that is that

Ford, during the 1920s, had written a series of articles

that became a book, a bestseller,

called The International Jew.

And it was about how Jewish financiers

were conspiring to undermine the American heartland.

They were also spreading a kind of promiscuous culture.

A kind of decadent culture.

They were the purveyors of movies,

lascivious movies and sexy novels

and they were behind bootleg liquor

and scandals of all kinds.

And Ford talks about this kind

of international Jewish conspiracy

to undermine hard working

frugal productive America.

And he's enormously popular.

Ford could have probably run for president

and maybe won in the mid 1920s.

- There were movements everywhere.

There were very sensible people

who had pretty ideas that were no longer sensible.

- [Voiceover] The crisis accentuated

the rise of populism and extremism.

All over the place there were upsurges

in anti-Semetism, xenophobia, and racism.

The Ku Klux Klan had four million members,

mainly in the South.

Their constitution said "Our duty is to maintain forever

"the supremacy of the white race."

They abdicated hatred towards foreigners,

Jews, and in particular, blacks,

whom they hunted down after dark to lynch them.

- The people forget what a dangerous time it was

politically in America and around the world.

Democracy was threatened in America

by the severe economic circumstances.

- The 30s are full of signs

of social upheaval on the right

that might be characterized as fascist or Nazi-inspired.

(band playing)

- [Voiceover] This procession of Nazi demonstrators

did not take place in Germany,

but in Central Park New York.

20,000 people including 8,000 uniformed stormtroopers

and thousands of American teenagers

who came from youth camps,

organized according to the model of the Hitler youth camps,

head towards Madison Square Garden

to proclaim the rights of white Christians, true patriots.

During the meeting, the crowd booed

President Franklin D. Roosevelt

and made the Nazi solute crying out "Heil Hitler!"

(shouting in German)

(American Pledge of Allegiance)

- They begin to parade in the streets

and they begin to beat up people in the streets.

Suspect people.

Jews, immigrants.

- For the first time in a very long time,

there was a serious possibility

of some kind of dictatorial government.

Some kind of ideological overthrow of democracy.

I think it was probably a real possibility.

(crowd cheering)

(gunshots)

- [Voiceover] On February 15, 1933,

two weeks after Hitler had risen to power,

Roosevelt narrowly escaped an assassination attempt

as he was making a speech in Miami.

The mayor of Chicago was hit by two bullets instead and died

thanking the Lord for sparing Roosevelt.

(somber music)

Roosevelt, who didn't attend the funeral,

went back to Washington where he multiplied by 20

the number of his bodyguards and stopped

traveling in open top cars.

He knew that he had many enemies.

That he was seen as a red by the business world,

the Supreme Court, and Congress.

In the car which drove the two presidents,

Hoover barely said a word to Roosevelt.

He knew that the new president

wouldn't spare him in his inaugural speech,

and he wouldn't be disappointed.

Only a fool can deny the somber reality of the present.

Those who governed us failed because they knew nothing

but the laws of profit.

Five hundred thousand Americans wrote to him

before he entered the White House

to welcome and encourage him.

Roosevelt took office.

He made a superhuman effort to give the crowd

the impression he was walking when in fact

he was being carried by his son and a bodyguard.

- [Franklin] So first of all, let me assert my firm belief

that the only thing we have to fear is

fear itself!

(applause)

- By the time he was inaugurated,

the financial system was paralyzed.

It was almost that way then.

The banks were hardly doing anything,

and something had to be done

to restore confidence in the banks.

- The banks were in such disarray

that he felt that he could revive the banking system

by closing all the banks.

- He didn't come on and say dramatically

"We're going to close the banks and we'll do something."

He came on in a much lighter mood

and said "Everybody is over anxious about this.

"We're going to close the banks,

"and all the banks that are sound

"will be allowed to reopen."

- [Franklin] I can assure you

that it is safer for you to keep your money

in a reopened bank

than to keep it under the mattress.

- When the banks reopened, the financial crisis had passed.

It was a brilliant piece of psychology.

- And one morning he said to Henry Morgenthau

who would later become his treasury secretary, not yet,

he said "Let it go up 21 cents."

And Morgenthau said "Why Mr. President?"

And Roosevelt says "Well it's because it's three times seven

"and three is a lucky number."

And the arbitrary aspect

of this displeased markets of course.

As Morgenthau wrote in his diaries.

"If anyone knew how we set the gold price,

"they would be frightened."

- What Roosevelt has that Hoover lacked is an open mind.

He's experimental.

He's willing to hear dissident voices.

Even voices he doesn't agree with.

And also a recognition that the crisis is severe

and you must try something,

and if that something doesn't work, try something else.

Don't sit there.

People have nothing to sustain them

through these difficult times,

and nowhere at all to purchase.

Franklin Roosevelt recognized that this crisis

of underconsumption is killing, potentially fatal.

- [Voiceover] After the banks,

Roosevelt decided to clean up Wall Street

as he had promised to do so in his New Deal.

- [Joseph] So there's absolutely

no doubt that there was a real New Deal.

We had new regulations to stop the kinds of

financial shenanigans that had caused the crisis.

- [Voiceover] To head the Securities and Exchange

Commission, Roosevelt chose Joseph Kennedy.

The father of the future President of the United States.

Roosevelt had wanted to make him

his Secretary for the Treasury, but Congress had refused

his nomination because Kennedy was about to be charged

by a Senate commission of inquiry

for stock market speculation,

embezzlement, and above all, for his roll

in the collapse of Wall Street in 1929.

- He becomes a major funder of his campaign,

and Roosevelt shocks the nation

by appointing Joseph Kennedy of all people

to be the first chairmen of the SEC.

- Well who better to watch the market?

Joseph Kennedy actually made a large bit of his fortune

not just in speculating in the 20s.

He was one of the few who got out of the market

because he saw what was coming.

When the market crashed, he went back in,

and he started buying handfuls of stock.

Have all kinds of companies and putting them in the drawers,

and waiting for them to come up again.

Because he knew eventually they'd be worth a lot.

- He has connections to the bootleg

liquor industry in the 1920s.

He's a larger than life figure who becomes

enormously wealthy and enormously despised

by ordinary Americans as a not to be trusted

speculator who makes a fortune

off of other people's misfortune.

- But Roosevelt knew Kennedy was

one of the brightest, shrewdest, yeah unscrupulous,

but after all, he's dealing with bankers and lawyers.

- They were putting the fox in charge of the chicken coup.

That was a criticism.

But the president had reasons for doing that,

which is he said Mr. Kennedy knew all the tricks.

- He knew Wall Street.

He knew the games.

He knew the backstories.

He knew all of that.

He knew where the bodies were buried.

- Kennedy as the first SEC chairman was known himself

for being somewhat of a swindler and a fraud.

But to me, that's not inconsistent

with what the SEC stands for.

What the SEC stands for is an agency

that permits and institutionalizes and exonerates fraud

instead of fighting it.

So the fact that Kennedy headed the SEC

was actually quite appropriate.

- [Voiceover] Roosevelt's naivety and lack of tact

were sometimes surprising.

To a group of young workers who had volunteered

to finally have something to eat, he declared

- I wish that I could take a couple of months off

from the White House and come down here and live with them

because I know I'd get full of health the way they have.

The only difference is that they've put out an average

of about 12 pounds a piece since they got here,

and I'm trying to take off 12 pounds.

(laughter)

- Roosevelt was good in reassuring people.

He was good in convincing people

that the government cared about them,

the government could do something.

(band plays)

- [Voiceover] Preceded by a big show,

Roosevelt launched his program

to fight the effects of the Great Depression

and to give a new boost to the American economy

which had been ravaged since the 1929 stock market crash.

Five billion dollars were allocated to fight unemployment.

Over three million Americans were hired.

Rising to eight million two years later.

Roosevelt had 15 key laws passed.

He established a system of social welfare.

Pensions, unemployment benefit.

He outlawed child labor.

Discrimination against hiring blacks and women.

And he introduced a minimum wage.

- What characterizes the New Deal in the mid 1930s

is a whole array of public works programs.

- Nobody had done this kind of thing before.

People did have an idea I think

that big public works projects would be a help,

and that was an important part of the New Deal

and it was psychologically important.

- The New Deal changed America.

We built countless roads,

bridges, dams, schools.

Roads and bridges here in New York City

where we're sitting today

that were build with New Deal money.

It changed America dramatically.

That wouldn't have occurred, and that set the stage

for the post World War II economic expansion.

- Government spending had been used to build highways,

construct schools, build hospitals, invest in research.

- We move into a welfare state, which we had not had before.

But they are really trying to

deal with both manufacturing, with construction,

with welfare, with social situation,

social welfare I should say.

Simultaneously.

- There was no social welfare system.

The United States was the last industrial country

in the western world to introduce

any kind of social safety nets like unemployment insurance,

old age pensions, and so forth.

- Social security did not apply

to the poorest of workers,

and these were the black workers.

It did not apply to domestic workers,

maids, dishwashers, porters.

These were the jobs that were held by black people.

They were the last in everything.

They were the first to lose their jobs if they had jobs.

The black people simply did not

benefit from the New Deal measures

in the way that white people did.

- African Americans were in the same position

as other Americans but worse.

Because they had been worse to begin with,

and comes the depression,

the situation is extremely difficult.

- The old unions had no black people.

They only had skilled workers,

and the black people were not the skilled workers.

They were not allowed into the unions.

- One of the reasons there is such a disparity

in incoming wealth in the 20s is because unions are so weak.

There's no defense against this

corporate effort to keep wages low.

- Striking is still illegal in the United States.

So until that time, a labor union

had absolutely no standing in law.

- All of that changes in the 1930s.

A whole series of social uprisings

in the 1930s move America's

political spectrum to the left

and has an enormous impact on Roosevelt himself.

- [Voiceover] Supported by public opinion,

Roosevelt set up the right to union

representation for all American workers.

It was an absolute revolution.

But its implementation met with a resonance

of the business world and company heads.

Strikes and factory sit ins occurred in many firms

to protest about the bosses'

refusal to recognize the unions.

But the bosses finally gave in

as industry was at a standstill.

- [Steve] The labor movement explodes.

It organizes millions of American industrial workers

who had never been organized before.

In the heartland of American industry.

- And that's what led to the wave of strikes.

And it put Roosevelt in a very awkward position.

And I don't think he regretted any of that,

but it did make recovery that much more difficult.

- There was a general strike in San Fransisco.

The whole city tied up.

In Minneapolis, a general strike,

hundreds of thousands of workers in the south

who work in texture mills went out on strike.

So this was a time in the country

of great turmoil and agitation.

And Roosevelt was very concious of that.

(people yelling)

- [Voiceover] The government of the New Deal

supported the bosses, even when the latter

had broken the new laws.

Steal factories in Chicago refused to recognize the unions.

Faced with the quasi-insurectionary nature of strikes,

the police with the help of the bosses' militia

killed ten workers and injured nearly 100.

Roosevelt, who didn't condemn the massacre,

sent in the national guard.

- The political leaders of the country

in both parties, Republican and Democratic Party,

were fearful when they saw the agitation in the country.

And when they saw one third of the workforce was unemployed.

And when they saw all the strikes and the riots going on.

The rich corporations were opposed to Roosevelt.

They were worried about whether the capitalist system

would be able to survive.

- And the business community and the financial community

begins to become very hostile.

They denounce him in the most vile ways.

As a cripple, as a Jew,

as a communist, as gay.

There's no epithet they won't direct at him.

They're so angry at the way he has broken

with the class after all that he came from.

He's considered a traitor to his class.

And Roosevelt says to them, bemused,

I think to some degree, "Why do you hate me so much?

"What I'm trying to do is save capitalism."

- A few timid people who fear progress

will try to give you new and strange names

for what we are doing.

Sometimes they will call it fascism.

And sometimes communism.

And sometimes regimentation.

And sometimes socialism.

But in so doing, they are trying

to make very complex and theoretical

something that is really very simple and very practical.

- Those were good things that Roosevelt did.

Those New Deals were good.

Other parts of the New Deal were absurd.

- [Voiceover] The only sector which

didn't improve was agriculture.

To help the farmers survive, Roosevelt got them

to reduce their production to push up

farming prices in exchange for compensation.

But this policy was contested by several economists

who considered that the government

was carrying out an unjustifiable destruction of wealth,

which was contrary to the most elementary morality.

The press began to criticize Roosevelt

for his lack of ideology

and for making contradictory decisions.

"Roosevelt is a chameleon on a scotch play,"

the New York Times wrote.

- The farmers were upset about

the decline in agriculture prices.

So they demanded government programs

that would pay them to slaughter their cattle

and to burn their crops in order to boost prices under FDR

which is crazy because people

were starving at the same time.

Why would you destroy perfectly good agriculture products?

Because they actually thought the problem

was too many agricultural products.

That's scary, you know?

Because you're committing suicide there.

There really was a spreading poverty,

and starvation in some areas.

- California put guards at some of the borders

trying to keep people out.

They had state troopers trying to

keep people from coming into California

because these people would have been

or were a burden on the state.

(somber music)

- You could literally see

the depression etched in the faces.

That's when those wonderful photographs

of people like Walker Evans and others.

You can see the torment.

It's like a cancer that ate at

the spirit of the American people.

- And one of the famous famous pictures of the depression

is of the migrant mother that was taken

in a pea farm in California.

She was a migrant worker coming from

another part of the country with her children.

- We grew up with that picture.

With a picture of a lady very hungry

with her children just devastated.

But you look at the picture a bit differently

when you know that it was payed for by the government.

And the man who ran the program

that created this picture wrote in a memoir of it

we had to make the depression look bad to keep our job.

So you can have real poverty but also real propaganda.

- Enemies of the New Deal describe

those photographs as propaganda on behalf of the New Deal.

And they were.

In some sense they were because

a new culture is being born then.

It's a culture of popular solidarity.

Very foreign to America.

And it is propaganda, but it's much more than propaganda.

It's a new way of life that's born in the 1930s.

- The New Deal helped many people.

It put millions of people to work.

Gave jobs to six million people.

It gave work to hundreds of thousands of young people.

- Was it perfect, no.

Were some of the programs bad, yes, unquestionably.

But that's never been in doubt.

The New Deal succeeded and failed

at pulling the country out of the Great Depression.

The economy does actually recover.

I don't mean recover back to the levels, it didn't.

But employment full, factories start up again,

people are thanks to New Deal legislation

able to own their own homes again

or to be able to meet their mortgage payments.

- There was a sharp rise in the economy.

A sharp expansion.

And by 1937, the GDP,

the total income of the country,

was back to the 1929 level after

a very sharp fall in the first four years.

So there was some recovery.

What happened in 1937 is fascinating.

Roosevelt listened to a small group of economists

in making the claim that you better

cut back government spending.

- So Roosevelt started cutting back on the New Deal.

Cutting back on the expenditures.

And no wonder, as we contracted the expenditures,

the economy started weakening.

- What happened?

Back into recession and unemployment went up again.

- And there was another depression within a depression

in the 1936 to 1937 period.

So it's simply not true to say that

the New Deal ended the Great Depression.

It deepened and prolonged it.

- What ended the depression is a depressing thing

in itself I suppose, but what ended the depression

was the rapid build up of military spending

because of the growing threat of war in Europe.

Once you began to get a military build up,

suddenly you have more jobs than you have people.

You go from massive unemployment

and massive under-utilization in the economy

to full tilt overnight.

- It was associated with an immense drive

for armaments production on a massive scale,

but also for all the things that soldiers need.

Trucks and clothing and this is what

got America back to work again.

The economy was boosted by the war industries.

So it was a kind of artificial way

of keeping the economic system going.

(When Johnny Comes Marching Home by Patrick Gilmore)

- [Voiceover] None of Roosevelt's efforts managed to restore

American industry to its level prior to Black Thursday.

It was the war in Europe which kickstarted US industry.

The Great Depression was over.

Seven years of desperate efforts

did less to cure the sick economy

than a few months of rearmament.

- Some people have made the wrong conclusion from that

and said you need military expenditures

to emerge from a downturn.

That's nonsense.

It's nonsense.

- We must be the great arsenal of democracy.

For us, this an emergency

as serious as war itself.

- Government spending on bombs was necessary

to protect us against fascism.

- [Voiceover] In March 1938, the German army

occupied Austria without firing a single shot.

World War II had just begun.

- And it's essentially only the Second World War

that brings the United States back to full employment.

- So that is certainly true.

We did not return to what we consider

full employment until 1940.

- Does war take us out of the depression?

I would be loathe to say that,

but certainly had some impact on it.

- That pump priming on a massive scale

represented by World War II produces

a prolonged period of prosperity

that lasts for another generation after the war.

- And in 1944 and 45, the greatest fear

of the American people was when the war ends,

will the depression come back?

♫Two million bushels of North African grain,

♫resold to Germany for Swiss Franks.

♫Paid for by a consortium of banks.

♫With a deal in futures that the Stock Exchange

♫unloads for coffee from Brazilian uplands.

♫Destined for Paris, before the whole deal sinks.

♫The checks written in indelible inks

♫outrace Atlantic's winter hurricanes.

♫Our benefactors?

♫Three trusts.

♫They compete for honor, glory, power and of course,

♫profits, where all happiness is contained.♫

- [Joseph] We learned something from the Great Depression.

Whether we've learned them enough is another matter.

- It's quite remarkable how ready we are

to forget all those lessons when times change

and particularly when there's a profit to be made

in forgetting that lesson.

- We had the knowledge to prevent a depression then,

but we didn't use it.

- We didn't know how to do that after 1929,

or there wasn't enough conviction

for the government to act aggresively.

- And just like the savants of the 1920s,

these folks turned out to be fatally wrong.

- We're never going to have another crash.

We're never going to have another depression.

And they were both wrong of course.

- They had tool they could have

implemented and they did not.

- It was among the tragedies was this

adoption of a damaging ideology

as a cover for allowing the financial industry

to do virtually anything they wanted.

And for allowing, and mostly motivated

by men and women who found a way

to make a fortune and claim

they were doing good for the nation.

- The wealth of the richest one percent of the country

has increased enormously.

And the gap between rich and poor

has become very very great.

And that's exactly what happened in the 1930s.

- We do need a New Deal.

The old New Deal

was a New Deal that worked

for the period at the time.

It was a reaction to the Great Depression.

The world's changed enormously in 75 years.

We are much wealthier now then we were then.

But we have not shared the fruits of that wealth equally.

- The level of greed simply rose.

It was accepted.

And greed became a very important part

of the financial overreaction,

the financial speculation that led to this disaster.

- We allowed the banks to exploit the poorest Americans.

Millions of Americans are losing their homes

and with it their life's savings.

They were preyed on.

There was predatory lending.

We knew it was going on.

It's an unfair system.

Those who are poor have nobody to defend them.

We live in a world with an enormous amount of resources

and yet a world in which a billion people

live under a dollar a day

and 40 percent of the world live

probably under two dollars a day.

I continue to think that we will be able to reform

for instance the international economic institutions.

I realize the important role that a reformed

international institutions can play.

I'm not sure whether I'm a realist or an optimist

when I say that I think that they,

I know I'm a realist to say that they need to be reformed.

I'm not sure when I'm a realist

when I say that they will be reformed.

♫Two million bushels of North African grain,

♫resold to Germany for Swiss Franks.

♫Paid for by a consortium of banks.

♫With a deal in futures that the Stock Exchange

♫unloads for coffee from Brazilian uplands.

♫Destined for Paris, before the whole deal sinks.

♫The checks written in indelible inks

♫outrace Atlantic's winter hurricanes.

♫At last the coffee arrives, also the wheat,

♫Needless to say, the deal was a success.

♫Who can deny that all of us have gained?

♫Our benefactors?

♫Three trusts.

♫They compete for honor, glory, power and of course,

♫profits, where all happiness is contained.♫